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Pricol Ltd.

BSE: 540293 Sector: Auto
NSE: PRICOLLTD ISIN Code: INE726V01018
BSE 00:00 | 05 Jun 41.45 0.30
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NSE 00:00 | 05 Jun 41.75 0.60
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OPEN 42.90
PREVIOUS CLOSE 41.15
VOLUME 16068
52-Week high 66.25
52-Week low 21.90
P/E
Mkt Cap.(Rs cr) 393
Buy Price 41.65
Buy Qty 10.00
Sell Price 43.00
Sell Qty 100.00
OPEN 42.90
CLOSE 41.15
VOLUME 16068
52-Week high 66.25
52-Week low 21.90
P/E
Mkt Cap.(Rs cr) 393
Buy Price 41.65
Buy Qty 10.00
Sell Price 43.00
Sell Qty 100.00

Pricol Ltd. (PRICOLLTD) - Auditors Report

Company auditors report

TO

THE SHAREHOLDERS

PRICOL LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Pricol Limited("the Company") which comprise the standalone Balance Sheet as at March 312019 the standalone Statement of Profit and Loss (including Other Comprehensive Income)the standalone Statement of Changes in Equity and standalone Statement of Cash Flow forthe year then ended and notes to the financial statements including a summary ofsignificant accounting policies and other explanatory information (hereinafter referredto as "standalone financial Statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards prescribed under Section 133 of the Act readwith the Companies (Indian Accounting Standards) Rules 2015 as amended ( "IndAS") of the state of affairs (financial position) of the Company as at March 312019and loss (financial performance including other comprehensive income) changes in equityand its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Companies Act 2013. Our responsibilities under those SAs arefurther described in the Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thestandalone financial statements under the provisions of the Act and the Rules thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

We draw attention to the Note 2.42 to the standalone financial statements regarding theproposed disposal of Investment in wholly owned subsidiaries including its step downsubsidiaries and the provision made thereon. The net realisable value of the Investmentsand potential devolvement on account of guarantee were arrived at based on management'sbest estimates and assumptions which have been relied upon by us.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our audit report.

S.No. Key Audit Matters How our audit addressed the Key Audit Matter
1 Non current Investments held for sale: The gross carrying value of the Investments classified as held for sale is र20145.07 Lakhs and the provision made for Impairment loss is र20067.01 Lakhs and provision on account of devolvement of guarantee (cost to sell) is र3130.74 Lakhs. We identified the determination of impairment loss of these investments as a key audit matter due to the significant judgements involved in the determination by the Management of the Net realisable value and the estimation of cost to sell. Validated the assumptions and judgements made by the management in estimating the Net Realisable Value.
Evaluating the reasonableness of the management's estimation of the cost to sell.
Refer to Note No. 2.17 2.32 and 2.42 Assessing the appropriateness of the selling price estimated by the management by comparing the estimated sale price with an independent valuation report.
2 Trade Receivables and Provision for expected credit loss: The Trade Receivable as at March 312019 is र18758.95 Lakhs bad debts written off (Net) is र24.51 Lakhs and the credit to the Statement of Profit and Loss by way of excess provision for credit loss written back for the year ended March 31 2019 is र105.94 Lakhs. The collectability of the Company's aged Trade Receivables and the determination of provision for bad and doubtful debts of Trade Receivables is a Key Audit Matter due to the judgement involved in assessing the recoverability. Refer to Note No. 2.12 2.35 and 2.41 Evaluated and tested the Company's processes for trade receivables including the credit control collection and provisioning processes. Evaluated the management estimates used to determine the provision for bad and doubtful debts.
Reviewed the ageing tested the validity of the receivables discussed with the management the disputes if any with customers understood and evaluated the reason for delay in realisation of the receivable and possibility of realisation of the aged receivable.
Tested the sufficiency of the Provision for bad and doubtful debts charged in the Statement of Profit and Loss for the year ended March 31 2019.
Provisions for pending legal cases - Assessing the adequacy of provisions by discussing with the management and reviewing correspondence with the respective authorities;
3 As at March 31 2019 the Company has a provision of र598.89 Lakhs as against various outstanding litigations of र2007.29 Lakhs.
Relying on judicial pronouncements;
These provisions are estimated using a significant degree of management judgement. Refer to Note No. 2.23(a) and 2.45 Obtaining opinion/views from the company's external legal advisors regarding the likely outcome magnitude and exposure to the relevant litigations and claims.

Information Other than the Standalone Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the Annualreport for example Directors' Report and Management Analysis including Annexures thereonbut does not include the standalone financial statements and our Auditor's report thereon.The other information is expected to be made available to us after the date of our auditreport.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.

When we read the other information as stated above which is expected to be receivedafter the date of our audit report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance andtake necessary actions as applicable under applicable laws and regulations.

Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the state ofaffairs (financial position) profit or loss (financial performance including othercomprehensive income) changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under Section 133 of the Act read with relevant rules issuedthereunder.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgements and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls and ensuring their operating effectiveness and the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the standalone financial statements the Board of Directors is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless the Board of Directors either intends to liquidate the Company or tocease operations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an Auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgement andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourAuditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Other Matter

The corresponding figures and financial information of the Company for the year endedMarch 31 2018 included in these standalone financial statements are based on thepreviously issued statutory financial statements prepared in accordance with the Companies(Indian Accounting Standards) Rules 2015 audited by the predecessor auditor whose reportfor the year ended March 312018 dated May 30 2018 expressed an unmodified opinion onthose standalone financial statements.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1) As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Act we give in "Annexure 1" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

2) As required by Section 143(3) of the Act we report that:

a. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;

b. In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

c. The standalone Balance Sheet the standalone Statement of Profit and Loss thestandalone Cash Flow Statement and the standalone Statement of Changes in Equity dealtwith by this Report are in agreement with the books of account;

d. In our opinion the aforesaid standalone financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act read with relevant rulesissued thereunder;

e. On the basis of written representations received from the directors as on March312019 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2019 from being appointed as a director in terms of Section164 (2) of the Act;

f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls we give ourseparate Report in "Annexure 2".

g. With respect to the matter to be included in the Auditors' Report under Section197(16) of the Act;

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of Section 197 of the Act.

h. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies

(Audit and Auditors) Rules 2014 in our opinion and to the best of our information andaccording to the explanations given to us:

i) The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements - Refer to Note No. 2.45 to the standalonefinancial statements;

ii) The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts - Refer to Note No. 2.44 to the standalone financial statements;

iii) Dues of र7.08 Lakhs to Investor Education and Protection Fund (IEPF) pertainingto FY 2010-11 were pending to be transferred on account of certain technical glitches withMCA portal which is yet to be resolved. The due date for transferring the amount to IEPFwas October 17 2018. The Company is co-ordinating with the respective intermediaries torectify the same.

For VKS Aiyer & Co.
Chartered Accountants
ICAI Firm Registration No. 000066S
V S Srinivasan
Coimbatore Partner
15th June 2019 Membership No. 13729

ANNEXURE 1 TO THE INDEPENDENT AUDITOR'S REPORT

[Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'in the Independent Auditor's Report of even date to the members of Pricol Limited onthe standalone financial statements for the year ended March 312019]

i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b) During the year fixed assets have been physically verified by the management as perthe regular programme of verification which in our opinion is reasonable having regardto the size of the Company and the nature of its assets. As informed no materialdiscrepancies were noticed on such verification.

c) The title deeds of immovable properties recorded as fixed assets in the books ofaccount of the Company are held in the name of the Company.

ii) The inventory (excluding stocks lying with third parties) has been physicallyverified by the management during the year. In respect of inventory lying with thirdparties these have substantially been confirmed by them. In our opinion the frequency ofverification is reasonable. As informed material discrepancies noticed on physicalverification carried out during the year have been properly dealt with in the books ofaccount.

iii) The Company has granted loans secured or unsecured to companies firms LimitedLiability Partnerships or other parties covered in the register maintained under Section189 of the Act.

a) According to the information and explanations given to us and based on the auditprocedures conducted by us we are of the opinion that the terms and conditions of theaforesaid loans granted by the Company are not prejudicial to the interest of the Company.

b) The schedule of repayment of principal and payment of interest in respect of suchloans has been stipulated and the repayments or receipts are regular.

c) In respect of the aforesaid loans there is no overdue amount of loans granted tocompanies firms Limited Liability Partnerships or other parties listed in the registermaintained under Section 189 of the Act.

iv) Based on information and explanation given to us in respect of loans investmentsguarantees and securities the Company has complied with the provisions of Section 185 and186 of the Act.

v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public within the provisions of Sections 73to 76 of the Act and the rules framed there under with regard to the acceptance ofdeposits.

vi) We have broadly reviewed the books of account maintained by the Company in respectof products where the maintenance of cost records has been specified by the CentralGovernment under sub-section (1) of Section 148 of the Act and the rules framed thereunder and we are of the opinion that prima facie the prescribed accounts and records havebeen made and maintained.

vii) a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund employees' state insurance incometax sales tax service tax value added tax goods and services tax customs duty exciseduty cess and any other material statutory dues applicable to it.

AND

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income tax sales taxservice tax value added tax goods and services tax customs duty excise duty cess andany other material statutory dues applicable to it were outstanding at the year end fora period of more than six months from the date they became payable.

b) According to the information and explanation given to us the dues outstanding withrespect to income tax sales tax value added tax goods and services tax customs dutyexcise duty on account of any dispute are as follows:

Name of the statute Nature of dues Amount रLakhs Period to which the amount relates Forum where dispute is pending Remarks
Central Excise Act / i) Excise Duty 60.18 High Court
Service Tax Act / ii) Service Tax 154.03 High Court
Customs Act iii) Excise Duty 689.04 CESTAT
iv) Service Tax 0.60 CESTAT
v) Customs* Customs Duty 208.10 (1999) to 2017 CESTAT * र66.43 Lakhs has been paid under protest
Penalty 218.06
vi) Excise Duty 37.04 Commissioner Appeals
vii) Service Tax 7.88 Commissioner Appeals
viii) Customs Duty 8.95 Joint Secretary - Ministry of Finance
ix) Excise Duty 288.09 Departmental adjudication
x) Service Tax 28.05 Departmental adjudication
xi) Customs Duty 12.83 Departmental adjudication
Central Sales Tax Act CST 177.60 2009-10 to 2011-12 Additional Commissioner
VAT 116.84 2011-12 to Commissioner Appeals
2013-14
2007.29

viii) According to the information and explanations given to us the Company has notdefaulted in repayment of loans or borrowings to financial institution(s) bank(s)government(s) or dues to debenture holder(s).

ix) In our opinion and according to the information and explanations given to us theCompany has not raised money by way of initial public issue offer/further public offer(including debt instruments). Money raised by way of term loans has been applied by thecompany for the purposes for which they were raised.

x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraud by the Company or any fraud on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such instance by themanagement.

xi) According to the information and explanations given to us managerial remunerationhas been paid/provided in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Act.

xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Therefore paragraph 3(xii) of the Order is not applicableto the Company.

xiii) According to the information and explanation given to us all transactionsentered into by the Company with the related parties are in compliance with Sections 177and 188 of Act where applicable and the details have been disclosed in the StandaloneFinancial Statements as required by the applicable accounting standards.

xiv) The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Thereforeparagraph 3(xiv) of the Order is not applicable to the Company.

xv) According to the information and explanations given to us the Company has notentered into any non-cash transactions with directors or persons connected with him duringthe year.

xvi) According to the information and explanation given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.

For VKS Aiyer & Co.
Chartered Accountants
ICAI Firm Registration No. : 000066S
V S Srinivasan
Coimbatore Partner
15th June 2019 Membership No. : 13729

ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT

[Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements'in the Independent Auditor's Report of even date to the members of Pricol Limited onthe standalone financial statements for the year ended March 31 2019]

Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSubsection 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of PricolLimited ("the Company") as of March 312019 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India ("ICAI''). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing specified under section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth issued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness.

Our audit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company;(2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 312019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the ICAI.

For VKS Aiyer & Co.
Chartered Accountants
ICAI Firm Registration No. : 000066S
V S Srinivasan
Coimbatore Partner
15th June 2019 Membership No. : 13729